Zero Corp's total common equity at the end of last year was $370,000

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Question

Zero Corp's total common equity at the end of last year was $370,000

Zero Corp's total common equity at the end of last year was $370,000 and its net income was $70,000. What was its ROE?

a. 18.92%

b. 16.52%

c. 14.57%

d. 17.41%

e. 15.32%

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Answer 1

Answer #1

Calculate the return on equity as follows:

Return on equity = Net income/ Total equity

= $70,000/ $370,000

= 0.1892 or 18.92%

Therefore, the return on equity is 18.92%.

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Answer 2

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Zero Corp's total common equity at the end of last year was $370,000

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